FREE CASH FLOW: Bailey’s Corporation’s financial statements (dollars and shares
ID: 2662157 • Letter: F
Question
FREE CASH FLOW: Bailey’s Corporation’s financial statements (dollars and shares are in millions) are provided here.
Balance Sheets as of December 31
2008 2007
Assets $14,000 $13,000
Cash and equivalents 30,000 25,000
Inventories 28,125 21,000
Total Current Assets $72,125 $59,000
Net plant and equipment 50,000 47,000
Total assets $122,125 $106,000
Liabilities and Equity
Accounts payable $10,800 $9,000
Notes payable 6,700 5,150
Accruals 7,600 6,000
Total current liabilities $25,100 $20,150
Long-term bonds 15,000 15,000
Retained earnings 32,052 20,850
Common equity $82,025 $70,850
Total liabilities and equity $122,125 $106,000
Income Statement for Year Ending December 31, 2008
Sales $214,000
Opera
Explanation / Answer
Networking Capital (NWC) for 2007: NWC2007 = Current Assets2007 - CurrentLiabilities2007NWC2007 = $59,000 -20,150 NWC2007 = $38,850 Networking Capital (NWC) for 2008: NWC2008 = Current Assets2008 - CurrentLiabilities2008NWC2008 = $72,125 -25,100 NWC2008 = $47,025
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